How Facebook Could End Up Controlling Everything You Watch and Read Online
How many of you are reading this because of a link you clicked on Facebook? In the online publishing industry (which WIRED obviously is part of), Facebook’s influence on site traffic—and therefore ad revenue—is difficult to overstate. Over the past year especially, “the homepage is dead” has become a standard line among media pundits. And more than anything else, it’s Facebook that killed it.
Given that links appear to be more clickable when shared on Facebook, online publishers have scrambled to become savvy gamers of Facebook’s News Feed, seeking to divine the secret rules that push some stories higher than others. But all this genuflection at the altar of Facebook’s algorithms may be but a prelude to a more fundamental shift in how content is produced, shared, and consumed online. Instead of going to all this trouble to get people to click a link on Facebook that takes them somewhere else, the future of Internet content may be a world in which no video, article, or cat GIF gallery lives outside of Facebook at all.
The prospect of Facebook becoming the Internet’s ultimate content cannibal got a big push earlier this week by New York Times media columnist David Carr. In his column Monday, Carr said Facebook is talking to some publishers about simply hosting their pages itself. Facebook’s apparent pitch is it’s already got a mobile experience users love, so why not cut out the extra click and deliver content more directly in a way audiences prefer? Oh, and Facebook will share the ad revenue.
Publishers likely will balk at ceding so much control to Facebook. But in the end, they may not have much choice. The arrangement might sound like a partnership at first, but it could end up like Amazon and the book industry. Book publishers may hate dealing with Amazon and resent its influence over their sales. But the last thing they would do is pull their books from Amazon. Thanks to its outsized leverage, Facebook’s ability to dictate terms to online publishers could wind up much the same.
As other media companies struggle to make mobile advertising pay, Facebook has become the master of the medium. In third-quarter earnings results reported Tuesday, the company posted a record $3.2 billion in revenue. Of that, nearly $2 billion came from mobile advertising. Facebook’s soaring growth to more than 1.3 billion monthly active users closely parallels its growth in mobile users. What’s more, mobile-only users account for one-third of Facebook’s user base.
For struggling publishers, going all-in with Facebook and getting even a tiny piece of that mobile ad money might seem much more appealing than limping along alone—and not just because Facebook has a proven ability to monetize mobile traffic. A publisher willing to place all of its content within Facebook’s walls could theoretically see that loyalty rewarded with better, more frequent placement in more News Feeds. Meanwhile, publishers that stubbornly stay on the outside might see their links get less of a boost. As a result, their traffic could suffer.
To be sure, Facebook has a strong interest in ensuring good stuff appears in users’ feeds, regardless of where that content calls home. If crappy content creators alone opt into a Facebook-only platform, and Facebook only promotes that crappy content, users might flee to where the good stuff lives. But Facebook probably wouldn’t be so blatant anyway. Its efforts at control will be more subtle.
In Facebook’s earnings call Tuesday, Facebook CEO Mark Zuckerberg mentioned the prominent role he sees for content in Facebook’s future:
Video is a very big priority. News is a very big priority, because a lot of people want to share that on Facebook already. And enabling public figures, whether they are celebrities, they are athletes, they are actors, or politicians or leaders in different kind of communities to get on Facebook and use the platform to distribute the content that they want.
So those are the three areas that you’ll probably see us investing the most in over the next year or so.
If Zuckerberg calls something a “big priority,” relevant companies best take notice. This is the same CEO who also said products don’t really get interesting until they have about 1 billion people using them. Facebook is now well past that threshold, which shareholders will be thankful to know means Zuckerberg finds it an interesting business. Which from a business standpoint means he’s unlikely to compromise.
What might an uncompromising approach to content look like? Imagine a publisher posts a YouTube link to Facebook and gets a few “likes” and clicks. Then imagine that same publisher uploads a video to Facebook, and gets a lot more views and “likes.” Maybe it’s a fluke. But over time, a pattern emerges. The videos posted straight to Facebook get watched more. Soon enough, all their videos are going straight to Facebook. Perhaps over time, the process repeats itself for other kinds of content.
Content With Facebook
For Zuckerberg, the business rationale behind encouraging such a transition isn’t sticking it to publishers but to YouTube’s parent company Google, which has as much interest in seeing content continuing living on the web as Facebook does in encouraging that content to migrate off it. For that matter, any company that commands outsize audience attention online probably is within Facebook’s sights. For instance, the company no doubt would love to monetize the hours you spend binge-watching on Netflix.
Enter Facebook’s deal with Hollywood studio Lionsgate, which is set to release five short films based on the blockbuster Twilight franchise exclusively on Facebook next year. Facebook may have built its empire on content generated by users. But that empire has become so effective at commanding attention online that Facebook has no reason not to try its hand at original and exclusive professional-grade content. Time spent on Facebook is money for Facebook. If an online shopping site can start making TV shows people will watch, Facebook could, too.
As for owning the future of content, Facebook already does. The company’s $2 billion purchase of virtual-reality headset maker Oculus might seem to be an extravagance in the context of Facebook as it looks and functions today. No one needs to friend you in 3-D. But as Facebook catches up to the web as a content platform, a mature, consumer-ready version of Oculus could catapult the company ahead. Not that Zuckerberg is in a hurry. He said he pictures somewhere between 50 million and 100 million Oculus headsets sold over the next 10 years.
By then, Zuckerberg will be just 40 years old. It’s only natural that he take the long view of his company’s future. “We’re going to be here for decades,” Zuckerberg told Wall Street analysts Tuesday. But when it comes to content, the more important question might be: will anyone else?